SIPP  

Xafinity writes £86m commercial property business

Xafinity writes £86m commercial property business

Xafinity Sipp and Ssas has reported an increase in commercial property transactions in 2018. 

The provider completed 183 commercial property, land purchases and transfers-in during 2018, with a value of almost £50m. 

In addition, the firm completed 75 commercial property and land sales with a transactional value of £36m. 

Jeff Steedman, head of business development for Sipp and Ssas at Xafinity, said: "Directors of SMEs have continued to use new employer contributions during 2018 to add to their existing pension plans in order to buy their commercial premises.

"Buying property with their pension remains an excellent tax efficient way to grow pension funds for retirement.  

"The rental income alone can provide great fund growth and any increases in the capital value of the property are free from capital gains tax.

"That said the value of owning business premises in your Sipp or Ssas is still not widely understood.  

"I’m always delighted to talk advisers through any aspect of this investment to give them the confidence to engage with clients about the excellent tax saving opportunities."

Xafinity’s total assets under administration for Sipp and Ssas clients at the end of 2018 stood at £2bn, with commercial property assets under administration valued at more than £700m. 

The firm has approximately 1,900 commercial properties or land under administration as at the end of 2018. 

But according to Scott Gallacher, chartered financial planner at Rowley Turton, the latest figures painted a more modest picture. 

Based on Xafinity's data he said the firm saw 108 net purchases in the year and attracted a net purchase value of £14m.

He said: "From the data the increase in net purchases/transfers in appears relatively modest, and it may be that commercial property is actually falling out of favour compared to other asset classes."

He calculated that the average property being transferred out was £480,000 whereas the average property being transferred in was just £273,000.

Mr Gallacher questioned whether commercial property as an asset was actually increasing in popularity, or whether it was cheaper properties attracting attention.  

A spokesperson for Xafinity said: "These figures reflect the average sales price and therefore there are some
considerably higher and some lower due to the maturity of commercial properties."